Electroequip vs Commissioner of Customs, New Delhi>1999(01)LCX0125

1999(01)LCX0125

IN THE CEGAT, COURT NO. II, NEW DELHI

S/Shri G.R. Sharma, Member (T) and A.C.C. Unni, Member (J)

ELECTROEQUIP

Versus

COMMISSIONER OF CUSTOMS, NEW DELHI

Final Order No. 7/99-B2, dated 22-1-1999 in Appeal No. E/679/98-B2

Cases Quoted

Asia Engineering Co. v. Collector — 1996(11)LCX0062 Eq 1997 (092) ELT 0066 (Tribunal) — Followed [Paras 2, 3, 4, 5, 8, 10]

Kamalakshi Financial Corpn. v. Collector — 1991(09)LCX0044 Eq 1991 (055) ELT 0433 (S.C.) — Referred [Para 3]

Advocated By : Shri Pradeep Jain, Advocate, for the Appellant.

Shri S. Ramanathan, JDR, for the Respondents.

[Order per : G.R. Sharma, Member (T)]. - The Commissioner (Appeals) in the impugned order held that “Hence after careful reading of both Headings CTH 9022 and 9027, the ionization smoke detection does not appear to be covered by 9027 either description-wise or on functional basis. CTH 9022 covers apparatus based on X-ray, alpha, or gamma rays. Functioning of the ionization smoke detection is based on radio-active material and is specifically covered under CTH 9022 which covers all equipments based on radio-active material or X-ray, alpha, beta or gamma rays which emanate from radio-active materials.” Being aggrived by this order, the appellants have filed the captioned appeal.

2. The facts of the case briefly stated are that the appellants imported a consignment of intelligent ionization detectors, photoelectric smoke detectors, heat detectors and other parts and claimed classification under CTH 9027.10. On perusal of the product information leaflets of the intelligent ionization smoke detectors, the customs authorities observed that it senses changes in air samples from its surrounding, analyses the information and then determines whether an alarm should be initiated or not. It was also noticed that this device also incorporates light emitting diodes that indicate the status of the detector. In normal conditions, green LED flashes, whereas under alarm conditions red LED starts flashing. It was also noticed that it has also a stand alone condition in which green and red LED flash continuously. The department after considering the submissions of the appellants held that smoke detector is used as a part of a fire alarm system and the CEGAT’s order in the case of Asia Engineering Co. v. CC, Bombay [1996(11)LCX0062 Eq 1997 (092) ELT 0066 (T) = 1997 (070) ECR 397], the lower authority ordered classification under CTH 9022.90.

3. Shri Pradeep Jain, ld. Advocate appearing for the appellants submitted that this detector is not a complete fire alarm system but simply a smoke detector containing radio-active substance; that the device imported by the appellants is a complete sophisticated smoke detection equipment which cannot function as complete fire alarm system and it does not have signalling/alarm capability for which it has to be connected to control panel; that the role of smoke detector is to accurately measure and analyse the smoke in the environment, which is being done on its own function of smoke microprocessor and therefore, this device cannot be treated as fire Alarm system; that the device is classifiable independently under chapter sub-heading 9027.80; that it cannot be treated as part of complete system namely, fire alarm system; that the Commissioner in his own finding admitted that the goods in question are merely a part of the fire alarm alarm system but was not the whole fire alarm system and, therefore it should not have been classified under Chapter Heading 9027.80. Ld. Counsel submitted that their case was covered by the judgment of this Tribunal in the case of Asia Engg. Co.; that since this judgment was not stayed or set aside by any higher forum, therefore it was binding on the Commissioner (Appeals); that the Tribunal in that case after discussing the facts held that the goods in question were classifiable under chapter sub-heading 9027.80; that the exclusion clause of explanatory note for classification of the product under Chapter Heading 9027 has not been correctly applied by the lower authority. Ld. Counsel also submitted that the observation of the lower appellate authority that the Tribunal had not dealt with alternative classification of the goods under Chapter Heading 9022 vis-a-vis 9027 is wrong; that a mere reading of the Tribunal judgment shows that the Tribunal discussed the issue and came to the conclusion. He submitted that the Commissioner (Appeals) has wrongly held that the goods in question do not have independent capability to detect and measure smoke whereas on the contrary as per the letter issued by the DGTD which was relied upon by the Tribunal in the case of Asia Engg. Co. and as per technical literature produced clearly establishes beyond doubt that the instrument has got independent capability to measure the quantity of smoke through automatic means. Ld. Counsel submitted that the Apex Court in the case of Kamlakshi Financial Corp. [1991(09)LCX0044 Eq 1991 (055) ELT 0433 (S.C.)] held that in terms of judicial justice, orders of the Tribunal are binding on the parties and, therefore, the orders of the Tribunal in the case of Asia Engg. Co. were binding on the Commissioner (Appeals). Ld. Counsel, therefore, prayed that the appeal may be allowed.

4. Shri S. Ramanathan, ld. JDR appearing for the Revenue submitted that the imported goods is a complete equipment for the purpose of smoke detection; that the goods is a part of fire alarm system; that the goods contained radio-active material; that it was not classifiable under Heading 8531; that the only contention, therefore is whether the goods are classifiable under chapter sub-heading 9022.90 as held by the department or under chapter sub-heading 9027.80 as claimed by the importer; that the Chapter Heading 9022 reads as “Apparatus based on the use of X-rays or Alpha, Beta or Gamma radiations, whether or not for medical, surgical, Dental or Veterinary uses, including radiography or radiotherapy apparatus, X-ray tubes and other X-ray generators, High tension Generators, Control Panels and Desks, Screens, Examination or treatment tables, Chairs and the like.” Under this main heading, sub-heading 9022.90 covers “Other apparatus based on the use of alpha, beta or gamma radiation, whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus.” He submitted that the main heading 9027 reads as “Instruments and apparatus for physical or chemical analysis (for example polarimeters, refractometers, spectrometers, Gas or smoke analysis apparatus) instruments and apparatus for measuring or checking viscosity, proximity, expansion, surface tension or the like. Instruments and Apparatus for measuring or checking quantities of heat, sound or light (including exposure meters) microtones.” Sub-heading 9027.10 covers “gas or smoke analysis apparatus.” Ld. JDR submitted that the CEGAT in its judgment in the case of Asia Engg. Co. had no occasion to discuss classification of the product under sub-heading 9027.80 vis-a-vis 9022.90; that there was a specific entry for smoke and gas analysis under Chapter Heading 9027.10; that entry under sub-heading 9027.10 is a specific entry; that sub-heading 9027.80 is not specific entry but residuary entry and that the smoke detector is not specifically mentioned under sub-heading 9027.80; that the entry under chapter sub-heading 9027.80 reads “other instrument and apparatus.” He submitted that as HSN Explanatory note under Chapter Heading 9027 at page 1383 covers electronic smoke detectors which are based on beam light and these apparatus may be fitted with an alarm device but item under dispute does not satisfy the above requirement both on descriptive characteristics or on principle of functioning. Ld. JDR submitted that criterion for classification under sub-heading 9022.90 is that its principle of functioning should be based on radio-activity; that in the instant case according to the chapter note classification under Chapter Heading 9027 is ruled out on the ground that this heading refers to all those items which have an inbuilt measuring function. He submitted that the imported goods will be covered under chapter sub-heading 9022.10 and prayed that the appeal may be rejected.

5. Heard the submissions of both sides. The two entries are under Chapter 90 of the Customs Tariff. The first entry is 9022.90 and the second entry is 9027.10. The contention of the importer is that for the purpose of classification the specificity of the product is essential. It was contended that the item imported is for gas or smoke analysis; that it was specifically mentioned against chapter sub-heading 9027.10 and, therefore, it should be classified under that sub-heading whereas the department is of the view that for the purpose of classification under chapter sub-heading 9027.10 the apparatus should be based on light beam and not radio-activity; that admittedly the product imported by the appellants was based on of radio-active rays. The Revenue contended that admittedly the apparatus imported in the instant case is based on radioactivity and, therefore should be classifiable under chapter sub-heading 9022.90. We have also perused the order of this Tribunal in the case of Asia Engg. Co. [1996(11)LCX0062 Eq 1997 (092) ELT 0066 (T) = 1997 (070) ECR 0397 (T)].

6. We have also perused the technical literature. We note that ionization smoke detector gathers analogue information from its smoke sensing elements and converts it to digital signals. The detectors on board microprocessor measures and analyses these signals. It compares the information to historical readings and time patterns to make an alarm decision. Digital filters remove signal patterns that are not typical of fires. Unwanted alarms are nearly eliminated. Although ionization detectors have a wide range of fire sensing capabilities, they are best suited for detecting fast flaming fires. Technical literature also shows that the detector will not sense fires that start in areas where smoke cannot reach the detectors. Smoke from fires in walls, roofs or on the opposite side of closed doors may not reach the detector to alarm it.

7. We have also perused HSN Explanatory note on Page 1515 of Chapter Heading 90.27 where in it has been explained (9) Electronic smoke detector used in furnaces, oven etc. for example in which a beam of light (or infra red) rays is directed onto a Photo electric cell. According to the density of the smoke, the passage of this beam through the smoke causes variation in the current in the photo electric cell circuit, thus operating a graduated indicator or a recording system and in certain cases a regulating valve. This apparatus may be fitted with an alarm device.

8. We have also perused the decision of this Tribunal in the case of Asia Engineering Company (supra) in which in para 6.3, it has been stated that ‘In the present case it is clearly noticed that the system works on ionization with radio active source as can be seen from the temperature’. The chartered Engineer also supports the view that ionization chamber consists of a radio-active source in addition to other things.

9. From the above, it is clear that the goods are specific, they are meant for detecting fire by analysing smoke. We have, therefore, to see whether there is any specific entry there to cover this item. We find that under Chapter Heading 90.27, there is a specific sub-heading 9027.10. Thus, this specific entry for smoke and gas analyser is to be preferred to any general entry or residuary entry. It is well settled principle of classification that if parentage can be assigned to an orphan, he should not be assigned the orphanage. Therefore, the goods in question shall be classifiable under 9027.10.

10. We note that in para 6.3 of its judgment, this Tribunal has held that “The operating principle of the item states that the detector contains ionization chamber consisting of a small Americium 241 radioactive source mounted between two metal electrodes to which a voltage is applied. The alpha particles emitted by the Americium ionise the air into positive and negative ions which separate and travel to electrodes of opposite sign.” Thus the product that was before the Tribunal in the case of Asia Engg. Co. was also based on radioactivity and the Tribunal after considering this aspect also came to the conclusion that the correct classification of the product was under 90.27. Thus, the contention of the Revenue that for classification under 9027.10 the product should not be based on radioactivity, is not supported by the technical literature and analyses thereof by this Tribunal in the case of Asia Engg. Co. We note that the product imported was meant for detection of smoke. We further note that under chapter sub-heading 9027.10 there is a specific entry for gas or smoke analysis apparatus. We, therefore, find that there is specific entry and that this entry shall prevail over the general entry or the general principle. The entry under chapter sub-heading 9022.90 is a general residuary heading and, therefore according to the principle of Rules of Interpretation, sub-heading 9027.10 is more appropriate for classification of the product. We note that though sub-heading 9022.90 was not considered in great detail by the Tribunal in the case of Asia Engg. Co., however, this was mentioned in the order of this Tribunal in the case of Asia Engg. Co. The Tribunal in that case had the benefit of opinion of DGTD and after examining the facts of the case, technical literature and DGTD opinion, the Tribunal came to the conclusion that the product was classifiable under chapter sub-heading 9027.80. After examining the various contentions raised before us including the contention of the judgment of this Tribunal in the case of Asia Engg. Co., we do not see any reason to disagree with the contention of the importer. Having regard to this judgment, the technical literature on the subject and HSN explanatory notes, we hold that the product merits classification under Chapter sub-heading 9027.10. The impugned order, therefore, is set aside and the appeal is allowed.

Equivalent 1999 (114) ELT 281 (Tribunal)